Families still struggle with cost of care, study reveals

Social Affairs Reporter

Little effect: More than a third of families struggle to pay childcare fees. Photo: Belinda Pratten

More than a third of families struggle to pay childcare fees despite increased federal government assistance over the past decade, a new report by public policy think tank The Australia Institute shows.

The report Trouble with childcare found that concerns about affordability outweighed difficulties with availability and quality.

Report author David Baker said government assistance through the childcare benefit and rebate had little affect on affordability.

"Each time the government has taken steps to reduce the proportion of household income spent on childcare services, the increased assistance has quickly been absorbed through the charging of higher service fees," he said.

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"Despite the cost of childcare being an election issue in 2004 and 2007 and subsequent increases in government assistance, a greater proportion of families were reporting cost difficulties by 2010.''

According to the Department of Education Employment and Workplace Relations, families with children in care pay an average of 7.5 per cent of their disposable income on fees after subsidies but Mr Baker found that many families are paying much more.

The Australia Institute's research found households reporting cost difficulties were paying an average of 9.6 per cent of their disposable income on childcare.

Peak welfare body the Australian Council of Social Services has previously stated childcare costs for low income families should be 5 per cent of their disposable income.

Mr Baker's analysis found that more than one in five low income households who reported cost difficulties were paying more than 10 per cent of disposable household income for childcare services.